Italian Bond Yields Pass Key 7% Level

Rome Can Afford Rising Yields, Analysts Say, but Broader Shunning of Bonds Would Mark a Dire Scenario for Euro Zone

By

Neelabh Chaturvedi

Updated Nov. 9, 2011 7:39 pm ET

LONDON—Yields on Italian bonds soared, rising to the highest levels since the inception of the euro in the latest sign that investors are fast losing faith in one of the world's biggest sovereign-bond markets.

Debt prices plunged after clearinghouse LCH.Clearnet SA made it more expensive to trade the country's bonds, sending the yield on the benchmark 10-year bond up as much as 0.77 percentage point to 7.45%, despite Prime Minister Silvio Berlusconi's pledge Tuesday to step down after Parliament approves austerity measures...

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